To no one's surprise, U.S. Fed officials announced this week they will officially end its third round of quantitative easing, the stimulus program designed to help boost the economic recovery. This comes after months of gradually reducing the bond-buying program to ease the economy back onto more solid footing.
While the economy has slowly picked up steam, the housing recovery has remained rocky with lackluster growth in 2014 new home sales. A large problem area is the lack of new homebuyers: Those in their 20s and 30s buying homes for the first time. Part of this phenomenon can be attributed to cultural/generational shifts in which millennials are delaying these milestones, but in great part this delay is due to ever increasing amounts of student loan debt.
Growing student debt burdens
It is estimated that the average college graduate today walks away from a four-year degree with $29,400 of student loan debt. This amount of pre-existing debt can push a borrower's debt-to-income level beyond the 43 percent ratio threshold limited by the Consumer Financial Protection Bureau.
To help manage student loan debt and increase your ability to qualify for a mortgage, there are ways to adjust your payment plans for federal student loans. Getting on a "graduated" payment plan can put a cap on your monthly loan repayments based on income levels. Student loans can also greatly affect credit scores, so be sure you make payments on time every month to keep your credit scores high.
If you are concerned about qualifying for a mortgage due to student loans or other debt, consult a Vertex loan advisor. Some of Vertex's loan advisors also hold distinction as Certified Financial Planners and can help you manage your financial obligations with more ease. Feel free to call us anytime toll-free at 877-939-0339.
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